By HAN News Desk
MOGADISHU — A new provision currently before the Federal Parliament of Somalia proposes that only the Federal Government of Somalia will have the authority to enter into agreements related to international loans, a move that could significantly reshape financial relations between the central government and regional administrations.
The draft clause states that the Federal Government alone is responsible for negotiating and signing agreements concerning international borrowing. If approved, the measure would prevent federal member states from independently entering into loan agreements with foreign governments, international financial institutions, or other external partners.
Supporters of the proposal argue that centralizing authority over international borrowing is necessary to ensure transparency, protect Somalia’s financial stability, and maintain consistent national economic policy. They say the measure could help the country manage its debt responsibly and strengthen coordination with global lenders.
Critics, however, say the proposal may limit the financial autonomy of Somalia’s federal member states, many of which rely on external partnerships to fund infrastructure, development, and public services. Some regional leaders have expressed concerns that the change could slow down development projects at the local level.
The debate highlights ongoing discussions about the balance of power between the federal government and regional administrations in Somalia’s federal system. Lawmakers in the Federal Parliament are expected to deliberate further on the proposal before deciding whether to adopt it into law.
If passed, the measure would mark a significant shift in Somalia’s fiscal governance, reinforcing the central government’s role in managing international financial relations while redefining how regional authorities engage with external partners.
